Employees’ needs can feel like a moving target, changing with new trends, technologies, and values. But in the past year, companies have made tough decisions—mandating office returns, flattening management layers, tightening salary increases—all in the name of stability and growth. The push and pull of power between employer control and employee expectations is rewriting common assumptions about work, as highlighted in the latest annual Korn Ferry survey. Think getting everyone back into the office will enhance team spirit? That’s not how talent sees it. Does it seem like your teams are working harmoniously across the generations? Ask your Gen Z employees about that. Feeling like you’re winning with AI? The truth is that you’re probably falling behind. The Workforce 2025 survey results are clear. The workforce is evolving—and fast.
“When companies need to cut labor costs, middle managers are often the first in line for layoffs,” the Korn Ferry report found. “And that tactic seems to be affecting many workers this year.” Forty-one percent of employees told Korn Ferry that their organization has slashed management layers, while 43 percent of employees say their leaders aren’t aligned, and 37 percent say the lack of managers has left them feeling directionless.
“The impact is more than just a slimmed-down organizational chart with fewer managers,” the report said. “Losing that management layer can quickly lead to employee confusion and dissatisfaction, ultimately affecting productivity.”
Forty-three percent of employees say their leaders aren’t aligned, and 37 percent say the lack of managers has left them feeling directionless. Why does this happen? “When managers leave, senior executives are left to pick up the slack—on top of their heavy strategic workload,” the Korn Ferry report said. “Instead of fully focusing on crucial business decisions and growth plans, now they also have responsibility for the day-to-day issues their managers handled, only with less time to deal with everything. The result is less time for strategic planning, collaboration among their peers, and communication with their direct reports. It’s no surprise, then, that 43 percent of senior executives doubt their ability to fulfill their responsibilities, compared to 40 percent of CEOs. And given their ever-growing workloads and responsibilities, who can blame them?”
Business Impact
Korn Ferry noted that reducing management population can lead to a multitude of problems:
- Lack of communication and alignment across the business
- Lower productivity due to lack of leadership support
- Increased turnover as limited promotion paths drive top talent to seek opportunities elsewhere
“When done well, eliminating levels can be part of a larger solution to reduce bureaucracy,” the survey found. “But without appropriate guardrails, any short-term gain in efficiency could lead to long-term pain.”
“When management disappears, so does direction,” said Lesley Uren, CEO, Korn Ferry Consulting. A leaner organization today can mean a leadership crisis tomorrow.”
Trusted Manager: The Underused Retention Tactic
Korn Ferry also found that 80 percent of workers say they would stay in a job because they have a manager they trust and as people increasingly resent companies for layoffs and corporate directives that indicate a lack of trust, such as workplace surveillance software and return-to-office mandates, having a manager in their corner matters more than ever. Indeed, the 2025 Korn Ferry Workforce survey respondents agree that a trusted manager is a top reason they not only stay at their organization, but why they remain excited and engaged with their work.
“Any company that wants growth needs to care about workforce engagement levels,” said Maria Amato, senior client partner. “Our research for the World’s Most Admired Companies found that organizations with the highest motivation and engagement saw twice the revenue growth of their worst-performing peers. Businesses know that having motivated workers makes a big difference to their bottom line. And great managers play a huge role in helping you retain top talent. For those people who have managers they love, it’s a risk they’re not often willing to take, which is why we’ve found that excellent managers tend to have the lowest staff turnover rates.
The Salary Squeeze
Korn Ferry found that cash is still king when people are looking for a new job. It won the top spot for why people would accept a new job in 2024, and it takes the crown again this year. “It’s always a powerful talent attraction tool, but money seems particularly relevant in 2025 when many workers are struggling with a serious salary squeeze,” the report said. “In the past year, cost-of-living increases have spiraled in most countries, yet salaries haven’t leapt up at the same pace.”
That’s why 70 percent of those in the 2025 Korn Ferry Workforce survey are feeling concerned about the cost of living outpacing their current salary. And 35 percent believe they are paid below the value of their skills.
“But most people won’t quit their current gig just for a higher bank balance, which might only be temporary,” the report said. “Right now, they also really want job security, rewarding work, better benefits, and more control over their working hours. If you can offer these, they’ll be powerful tools to attract top talent in 2025, even if you struggle to compete on pay.”
Employees who feel the cost of living is outpacing their salary are:
- More likely to leave within three months
- More focused on the complete package (salary and benefits)
- More likely to stick with a job they hate if the money is good enough
With employees becoming more geographically dispersed, companies need to review their compensation structures and align pay with the regional cost of living.
“A paycheck gets employees in the door,” said David Ellis, SVP, talent transformation. “Job security, meaningful work, and respect for personal boundaries keep them from looking for the exit.”
A New AI World Order
“AI isn’t just changing the way we work,” the Korn Ferry report said. “It’s reshaping the work itself. Almost everyone is grappling with AI in one way or another, but the countries powering ahead in the shift to AI might surprise you. While the U.S., Europe, and Japan have historically driven digital innovation, it’s now India, Brazil, and the Middle East emerging as the most AI-ready workforces.”
Korn Ferry found that most workers in emerging economies feel positive about AI’s impact on their roles, as opposed to many of their Western counterparts. The same markets leading in AI optimism are also the ones putting real money into AI training. Korn Ferry’s survey shows that workers who are trained to use AI are significantly more likely to embrace it.
More than 75 percent of workers in India and Brazil report receiving solid AI training, whereas employees in the U.S., Europe, and Japan don’t think they’re getting enough. This lack of training isn’t just a regional issue—it’s creating a critical disconnect between senior leaders and their teams. While 78 percent of leaders believe they have AI figured out, only 39 percent of workers agree.
With insufficient AI training, leaders often misjudge where it could be most effective, leading to a disconnect between their vision and the actual day-to-day application. Meanwhile, high-performing CEOs who excel in technology adoption have been shown to achieve higher annual revenue growth, according to Korn Ferry CEO assessment data.
“Leaders who master technology and AI aren’t just keeping up with the times,” said Bryan Ackermann, head of AI strategy & transformation, managing partner, assessment & succession, leadership & professional development. “They’re setting their businesses up for success.”
The Hybrid Headache
We’ve heard it for years now—hardly anyone wants to work in an office full-time and Korn Ferry found it’s true. According to the Korn Ferry Workforce 2025 survey, of the 59 percent of global employees who are working full-time in the office, only 19 percent actually want to be there. Yet, more employers are trying to enforce return-to-office mandates. What do people want instead? For 48 percent, hybrid would be ideal—yet only 27 percent have this option. And 25 percent really want to be fully remote.
“But that’s not the full picture,” the Korn Ferry report said. “The preference for work arrangements varies dramatically across different regions, with some being much more anti-office than others.”
In Brazil, for example, only 12 percent are happy with full-time office life, but in Japan, that jumps to 36 percent. This creates a real conundrum for multinational companies. Should they opt for a consistent global workplace policy or adapt it to regions?
One-size-fits-all policies risk alienating employees, while case-by-case approaches create complexity and confusion. The solution? Korn Ferry explained that a clear policy that defines your company’s approach, using your employer brand to turn this into a competitive advantage.
“The best workplace policies aren’t about control,” said Daren Kemp, president, EMEA. “They’re about clarity, culture, and making it easy for people to do their best work.”